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10. STOCK PURCHASE OPTIONS AND WARRANTS
 12 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
10. STOCK PURCHASE OPTIONS AND WARRANTS

The Board of Directors on June 10, 2009 approved the 2009 Long-Term Stock Incentive Plan.  The purpose of the 2009 Long-term Stock Incentive Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by employees and other key individuals.  The 2009 Long-Term Stock Incentive Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company.  A maximum of 1,500,000 shares of the Company's Common Stock is reserved for issuance under stock options to be issued under the 2009 Long-Term Stock Incentive Plan.  The Plan permits the grant of incentive stock options, nonstatutory stock options and restricted stock awards.  The 2009 Long-Term Stock Incentive Plan is administered by the Board of Directors or, at its direction, a Compensation Committee comprised of officers of the Company.

 

Stock Purchase Options

 

During the fiscal year ended June 30, 2017, the Company issued 500,000 stock purchase options.  

 

During the fiscal year ended June 30, 2016, the Company did not issue any stock purchase options.  

 

The following table summarizes the changes in options outstanding of the Company during the fiscal year ended June 30, 2017.

 

Date Issued   Number of Options     Weighted Average Exercise Price     Weighted Average Grant Date Fair Value     Expiration Date (yrs)     Value if Exercised  
Balance June 30, 2016     25,000     $ 0.15     $ 0.24       2.00     $ 3,750  
Granted     500,000       0.18       0.20       5.00       90,000  
Exercised     -       -       -       -       -  
Cancelled/Expired     -       -       -       -       -  
Outstanding as of June 30, 2017     525,000     $ 0.18     $ 0.20       4.81     $ 93,750  
                                         

The following table summarizes the changes in options outstanding of the Company during the fiscal year ended June 30, 2016

 

Date Issued   Number of Options     Weighted Average Exercise Price     Weighted Average Grant Date Fair Value     Expiration Date (yrs)     Value if Exercised  
Balance June 30, 2015     80,000     $ 0.66     $ 0.59       1.20     $ 52,900  
Granted     -       -       -       -       -  
Exercised     -       -       -       -       -  
Cancelled/Expired     (55,000 )     0.89       -       -       (49,150 )
Outstanding as of June 30, 2016     25,000     $ 0.15     $ 0.24       2.00     $ 3,750  

 

Stock Purchase Warrants

 

During the fiscal year ended June 30, 2017, the Company issued warrants to purchase a total of 10,424,998. The Company issued 455,000 warrants in conjunction with four promissory notes executed in February 2017 to June 2017. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The Company apportioned value to the warrants based on the relative fair market value of the Common Stock and warrants.

 

During the fiscal year ended June 30, 2016, the Company issued warrants to purchase a total of 5172,000. The Company issued 100,000 warrants in conjunction to an employment agreement entered into in July 2015 and 1,244,000 warrants in conjunction with a consulting agreement entered into December 2015 to June 2016. The Company issued 75,000 warrants in conjunction with a promissory note executed in October 2015. The Company issued 50,000 warrants as part of a commission’s agreement, 175,000 warrants as part of four advisory agreements. The Company also issued 3,338,000 warrants as part of a private placement and 190,000 warrants as part a finder’s fee agreement. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The Company apportioned value to the warrants based on the relative fair market value of the Common Stock and warrants.

 

The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted:

 

 

    June 30, 2017   June 30, 2016
Expected volatility   92-126%   106-114%
Expected dividends   0%   0%
Expected term   0-5 Years   2-5 Years
Risk-free interest rate   0.74-1.89%   0.71-1.01%

 

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the fiscal year ended June 30, 2017.

 

    Number of Warrants     Weighted Average Exercise Price     Weighted Average Grant Date Fair Value     Expiration Date (yrs)     Value if Exercised  
Outstanding as of June 30, 2016     35,034,550     $ 0.36     $ 0.45       4.31     $ 12,767,108  
Granted     10,424,998       0.46       0.18       2.07       6,701,566  
Exercised     (3,020,750 )     -       -       -       -  
Cancelled/Expired     (2,511,701 )     0.36       -       -       (4,323,838 )
Outstanding as of June 30, 2017     39,927,097     $ 0.38     $ 0.48       3.43     $ 15,144,835  

  

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the fiscal year ended June 30, 2016.

 

    Number of Warrants     Weighted Average Exercise Price     Weighted Average Grant Date Fair Value     Expiration Date (yrs)     Value if Exercised  
Outstanding as of June 30, 2015     31,981,778     $ 0.43     $ 0.50       4.98     $ 13,585,289  
Granted     5,172,000       0.45       0.33       3.52       2,316,000  
Exercised     (813,360 )     -       -       -       (630,364 )
Cancelled/Expired     (1,175,868 )     0.53       -       -       (2,513,817 )
Outstanding as of June 30, 2016     35,034,550     $ 0.36     $ 0.45       4.31     $ 12,767,108